UPDATE 1-EU regulators to probe aid for Porsche car project

BRUSSELS, July 11 (Reuters) - European competition
regulators will examine whether 43.7 million euros ($53.6
million) of aid from German authorities gave sports-car maker
Porsche an unfair advantage, in breach of EU rules.

The European Commission opened an in-depth investigation on
Wednesday into funding of Porsche's next model, the Macan
compact SUV, saying it was necessary because of the high market
shares of Porsche and its future owner Volkswagen.

"The commission will check whether the aid is necessary and
proportionate to provide an incentive for the investment and
whether its contribution to regional development outweighs the
distortion of competition," the EU regulator said in a
statement.

Porsche, which is being acquired by VW, plans to build the
Macan at its factory in Leipzig, eastern Germany starting in
late 2013. The government of the state of Saxony, based in
Leipzig, is planning to contribute 43.7 million euros and an
unspecified investment premium to the Macan project which costs
a total 522 million euros.

German authorities notified the EU regulator of the proposed
aid in December last year, according to the statement.

Porsche stood by its request for German state aid,
emphasizing planned investments and 1,000 jobs that are due to
be added to the Leipzig plant.

"We're taking steps to improve the structures of the
regional economy," spokesman Hans-Gerd Bode said. "That's fully
in line with aid guidelines."